Government Mandates Push Health Insurance Out Of Reach

October 1, 2002

The news that 41.2 million Americans went without health insurance last year coincides with efforts to force insurers to cover a growing list of ills in their policies. But experts point out that state mandates to accomplish that have already pushed up insurance costs and priced those 41.2 million Americans out of the market.

While there are currently very few federal health mandates, the states have been going wild.

In the past four decades, state legislatures have passed more than 1,500 mandates -- requiring insurers to cover everything from infertility treatments to wigs for cancer patients.

According to a recent study from PricewaterhouseCoopers, mandates were responsible for 15 percent of the $67 billion increase in health spending in 2001 alone.

The Health Insurance Association of America estimates that mandates are the reason one in four uninsured Americans lacks coverage.

New York state -- where health insurance costs are among the highest in the nation -- requires every policy to cover a vast universe of treatments and services ranging from contraceptives to ambulance transportation and foot care to nurse midwives.

Legislation now in the U.S. Senate would require that most medium and large businesses insure employees for every one of the conditions listed in the American Psychiatric Association's 941-page Diagnostic and Statistical Manual -- conditions that include, for example, "social phobia," or irrational fear of embarrassment.